The question of whether President Donald Trump has turned the United States toward a new “state capitalism” — one in which the government is not just economic referee but active player — has been answered. His second term brings policies that go well beyond traditional Republican pro-market orthodoxies, such as tax cuts and deregulation, and into direct involvement with production and capital. Yet this doctrine is less a coherent grand strategy than a set of ad hoc deals, sometimes pro-market and sometimes interventionist.

Some Trump policies — tax cuts, deregulating, talk of budget-deficit reductions — retain a traditional Republican tone. On the other hand, this administration’s protectionism and tariffs would have been inconceivable a decade ago. Republicans would also traditionally label the government’s acquisition of a 10% stake in Intel as socialism if proposed by anyone other than Trump. And other policies have the feel of mafia tactics made possible by the exercise of leverage, like letting Nvidia and AMD sell their chips to China in exchange for a 15% cut back to the U.S. government.

Trump also departs markedly from the past GOP playbook in his lack of recognition that the market allocates resources much better than politicians and bureaucrats do. He treats the market as a stage for negotiation to reorganize the world’s economies. Old-guard Republicans were globalists, whereas Trump built his appeal on “America First” nationalism and protectionism.

Earlier Republicans valued predictable rules, but as Cambridge legal scholar Antara Haldar noted in a Project Syndicate symposium this month assessing the direction of “Trumponomics,” the president “is willing to break any rule, norm, or promise … in the name of striking ad hoc corporate-style ‘deals.'” Where conservative-minded leaders of the past obscured the state’s role, Trump “flaunts it.”

Yet Haldar correctly argues that Trump’s approach differs from other forms of heavy-handed state control. It is neither the Chinese model nor that of the developmental state. It is “erratic, transactional, and short-sighted” and a rejection of the “quietly overbearing ‘Nanny State’ … in favor of a commanding, patriarchal ‘Daddy State.'”

Princeton University historian Harold James, another participant in the symposium, sees Trump as a break from the past due to his revival of state-directed “industrial policy.” This started under former President Joe Biden’s administration, but there is no doubt that Trump’s pursuit of a manufacturing revival and reshoring of global supply chains, along with his tariffs and equity stakes in private companies and his overall aim to rebuild U.S. strategic capacity, fall well into that category.

Unfortunately, as James argues, Trump’s brand of industrial policy encourages “hyper-activist corporate lobbying, with large and well-connected enterprises getting the best ‘deals.'” In my opinion, all industrial policies end up this way, not just Trump’s.

In this case, I find it particularly interesting that even industrial-policy advocates like Mariana Mazzucato, author of “The Entrepreneurial State,” seem displeased with Trump’s version. Done right, she claims in her contribution, industrial policy can support innovation and inclusive growth. She sees Trump’s approach as “gestures without purpose, interventions without coordination and spending without strategy.”